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Sunday, December 1st, 2013

Moving from Balkanized to Globalized in Cleveland

“Cleveland didn’t decline because industry left. Cleveland didn’t decline because people left. Vacant houses are not Cleveland’s cross to bear. Cleveland’s ultimate problem is that it is cut off from the global flow of people and ideas. Cleveland needs to be more tapped into the world.”

“It is important to note how this ‘[population] churn’ helps cities. Knowledge-based economies run on the quality of ideas. Ideas are not only a function of intelligence or education, but also the depth of information a person, or a city, receives. Historically, a lack of information – via a lack of demographic inflow – has ‘Balkanized’ social networks in Rust Belt cities. This has led to a culture of parochialism, which has hurt economic development.” – From the report “From Balkanized Cleveland to Global Cleveland”

Jim Russell and Richey Piiparinen have released a new whitepaper on Cleveland that should be read by anyone looking to reboot the economies of struggling post-industrial cities. Released under the auspices of Ohio City, Inc., “From Balkanized Cleveland to Global Cleveland: A Theory of Change For Legacy Cities” looks at how a lack of population churn has stunted Cleveland’s ability to connect to the global economy.

This paper puts a different spin on talent and the knowledge economy. “Knowledge” is not just facts acquired through education or work experience. It also includes the set of personal relationships and knowledge of other places and social networks that we all carry to some extent. Global cities not only score well on traditional knowledge measures, but because they are destinations for migrants, they excel in this more broader notion as well.

Cleveland is not a global city. In fact, in his book Caught in the Middle, Richard Longworth said, “When I went to Cleveland I found not alarm but complacency. In a city that is being destroyed by global forces…I found almost nobody willing to actually talk about globalization or global challenges…In all my travels through the Midwest, Cleveland was the only place, big or small, that seemed heedless of the global challenge.”

Part of that comes from a lack of migrants coming in to bring global knowledge and connectivity to global networks. Using IRS data from Telestrian, Russell and Piiparinen note that Cleveland actually only ranks 34th in America in its outflow of people, versus being the 28th largest metropolitan area. The city is actually doing a better than average job of retention.

The problem is that Cleveland ranks 47th in inflow of people. Attraction is very weak. Hence population decline, but also an inbred, closed society. About 75% of the people in metro Cleveland were born in Ohio, versus 30-60% in other, more globalized cities. Among large metros in the US, Cleveland ranks 6th in its percentage of the population living in the state they were born. (In fairness, this in part derives from a low foreign born percentage and the fact that the Cleveland region isn’t a multi-state metro).

I did my own analysis to take a look at the in-migration shed of the city. Cuyahoga County (the central county of the Cleveland region) had reported in-migration from 320 counties during the 2000s, with 228 of these sending at least 100 people to Cleveland. I decided to contrast with better preforming Columbus. There, the core county of Franklin drew people from 486 counties, with 335 of them having at least 100 people. Now Columbus is a huge university town, so I also looked at Indianapolis. Indy’s central county of Marion, which is significantly smaller than Cuyahoga in population, drew from 381 counties, including 273 of 100 or more people.

Clearly Cleveland is drawing fewer people from the outside world, and drawing from fewer places, than cities that are performing better, though one could quibble with the causality arrow here.

As a result, we see what is frequently true in such places. Cleveland’s social and power networks have balkinized. They don’t receive much new information or many new people, and what they do receive they don’t integrate well. Hence what Longworth observed. Cleveland needs much more demographic churn to open up these social networks and generate more global connectivity.

That’s the bad news. The good news is that there’s evidence this is already happening. The authors note that several central city areas have attracted newcomers from both inside and outside of the region – and these are disproportionately young. My own analysis showed that Cleveland had surprisingly strong downtown population growth of 4,200 people, one of the best showings in the Midwest.

The authors also note other potentially encouraging trends. A good number of Cleveland’s gentrifying neighborhoods are also becoming more not less diverse. While all they note diversity doesn’t mean people automatically start interacting with each other, it’s a start. What’s more, they suggest that the decline in social capital that results in diverse neighborhoods might paradoxically be a plus, as Cleveland suffers from excess social capital today. Lastly, they note that Cleveland has pretty high churn already with both New York and Chicago, making it one of the few similar types of cities that already has well-established migration paths. They believe this is poised to continue as high costs and “cool fatigue” push people out of many of today’s key global hubs like New York.

The potential for Cleveland in capturing this is significant in their view. As the paper notes, “This scenario, then, that’s unfolding in which coastal talent is arriving, or re-arriving, into the legacy city landscape can foretell an economic sea change…The long-term economic potential for this talent migration rests not in how many microbrews are consumed or condos are leased, but rather how it affects Cleveland’s global interconnectivity. These migrations are re-arranging Cleveland’s historical insular social networks, with the gentrifying neighborhoods acting as urban portals to the global flow of information.”

This was not intended as a critique of microbreweries. Rather, the idea is that luring people is about way more than just boosting the consuming classes, it’s about tangible change in the social and economic structure of the community.

No one should pretend that positive indicators like strong downtown population growth means Cleveland’s problems are solved. I’d describe this more as “green shoots” than anything. But it’s undeniably positive and provides a platform for further growth.

The authors don’t suggest any particular policies in response to their findings. They were more interested in moving beyond the traditional “brain drain” frame of talent and inject both some key facts around Cleveland’s migration patterns and their talent churn theory of civic change into the local discourse. They got a nice writeup in the Plain Dealer, so they are off to a good start there. But more work will need to be done in the future on an effective policy response.

Clearly I find a lot compelling in this. I’d encourage you to read the white paper. You may also be interested in my previous post “‘James Drain’ Hit Cleveland” for some similar thoughts.

9 Comments
Topics: Economic Development, Public Policy, Talent Attraction, Urban Culture
Cities: Cleveland

9 Responses to “Moving from Balkanized to Globalized in Cleveland”

  1. Paul Wittibschlager says:

    Enjoyed the article and the white paper.

    Jobs are the big migration draw to any metro and in this regard, Cleveland holds up well with its rust belt partners. Data below from careerbuilder.com. I include metro population numbers for reference.

    Category……..Cleveland..Pittsburgh..Detroit
    Engineering.jobs….537………434……1278
    Healthcare..jobs….455………457…….752
    Info Tech…jobs….547………405…….990
    Population……..2770k…….2360k…..4296k

    2012 Biotech
    Investment…….$ 226M…….$ 81M….$ 107M

    Cleveland is also doing well in attracting venture capital for biotech, an important area of growth, particularly in the urban core of University Circle (the local hub of healthcare.)

    Jobs from careerbuilder.com (11/30/2013), population from CBSA-EST2012-01, Cleveland and Akron populations are combined, biotech investment from bioenterprise.com

    I wonder why University Circle was not included in the analysis of gentrifying neighborhoods? (in the white paper)

  2. George Mattei says:

    This is a very important point. Creative destruction, as occurs in a capitalist economy, is crucial to growth and innovation.

    Interestingly, in looking at the Cleveland in-migration connections vs. Indy & Columbus, Cleveland is a larger metro, so you would expect it to have more connections. But it has fewer.

  3. myb6 says:

    I like Russell’s innovative thinking, but I wish he would tap the brakes a bit until he can demonstrate the causality arrow, particularly as one of his other major theses is that People Follow Jobs more than the Creative-Class theory accounts for.

    Given that People Often Follow Jobs, doesn’t it also make sense that in-migration will plunge if the region’s skills take a hit in market value? I don’t think the Rust Belt happened because all those cities simultaneously turned more parochial. Given the “encouraging trends” Russell mentioned, does he believe Cleveland suddenly turned less parochial lately? Seems to me that he’s treating an important Result (migration) as more of a Cause than it truly is.

  4. @myb6, I think he’s arguing that closed social networks are the problem. That’s actually backed up by academic research like Safford’s Garden Club dissertation, work on birthplace diversity, BYU’s study that having one socially distinct newcomer to a group improves performance, and I suspect many more. While the paper is a big ambiguous I think on this point, migration is not necessarily posited as the cause of closed social networks. Rather, it’s proposed as a solution, a way to open them up.

  5. Jim Russell says:

    “does he believe Cleveland suddenly turned less parochial lately?”

    @myb6, I don’t believe that. But you raise an interesting question: Why did the Rust Belt happen? The parochialism is an effect of the Rust Belt. What caused the Rust Belt? I used to agree with Richard Longworth. Now, I don’t. Pittsburgh’s decline started in 1910. NAFTA is a few decades late to the funeral.

  6. myb6 says:

    Aaron and Jim, thanks for the responses, I greatly enjoy both your writings and appreciate the obvious hard work you invest.

    RE Aaron: Absolutely, I understand (and agree with) the argument that open social networks and migration are good for an economy. But how large is the effect? The data certainly correlate, but we don’t really know much until the causal ambiguity is resolved.

    RE Jim: I would suggest that you and Longworth are talking about two separate phenomena. Fast relative rise and slow relative decline seems to be pretty normal for a city, going far back in history; I agree that turning point hit the non-auto Foundry around 1900. Until 1970, the relative decline was nice and slow, barely measurable in some places (I obviously defer to your Pittsburgh expertise, but I think the city held its own 1920-1970). Then things fell off a cliff, not just for the non-auto Foundry, but also other groups of cities at different points in the historical pattern: Auto, River (Cinci/StL), Upstate NY, maybe Philly/Balt too. If we’re discussing that latter phenomenon, seems to me that your initial instincts on Longworth still hold.

  7. Paul Wittibschlager says:

    Good documentary on decline of Cleveland, suburbanization, revitalization efforts.

    http://www.youtube.com/watch?v=KpWS4_YtkUg

    Enjoy this website, Happy Holidays to all.

  8. Jim Russell says:

    Paul,

    Thank you for the link. I watched the entire documentary yesterday. Great viewing.

  9. Paul Wittibschlager says:

    Jim: My pleasure. You may be interested in these two short videos documenting Cleveland’s horrific “Erieview project”, a 1960s urban renewal hatchet job of large proportion.

    http://www.youtube.com/watch?v=qag66QZdyq0&feature=c4-overview-vl&list=PL08079218451672E2

    http://www.youtube.com/watch?v=2fyzef7em5Q&list=PL08079218451672E2

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